President’s visit to congress results in two approvals

President Laura Chinchilla went to the legislature Thursday to seek approval of various tax bills. The visit met with success.

Later in the day lawmakers approved two measures. The first strengthens tax collection, and the second approves a $60 million loan from the Banco Interamericano de Desarrollo to fix up the municipal road systems.

Ms. Chinchilla also told Juan Carlos Mendoza, the president of the congress, that he would have to tighten the belt, too. She said that the central government budget would be cut 50 billion colons or about $100 million.

Ms. Chinchilla said the lawmakers have to approve the $300 annual tax on corporations so that the country can invest $30 million into the Escuela Nacional de Policía and into other security measures. She also lobbied for approval of another loan, this one also from the Banco Interamericano de Desarrollo for $180 million.

Lawmakers brought up the corporate tax in the full legislative session in the afternoon, but it appears they did not have time to discuss it or take any action. This likely is to be the first order of business Monday.

Ms. Chinchilla is in a strong strategic situation. August is one of those periods when the executive branch controls the agenda of the Asamblea Legislativa. Lawmakers cannot approve anything that has not been put before them by the president.

Ms. Chinchilla told the president of congress that the country needed to construct yet another hydro power plant to avoid electrical shortage in the coming years. She also noted that the country was facing the biggest deficit in the last 30 years, according to a summary provided by Casa Presidencial.

Ms. Chinchilla has been critical in public speeches of the slow progress of her tax plan through congress. Thursday she was less accusatory. It appears that she may have obtains some support for her cornerstone tax plan which seeks to raise $1 billion a year with a value-added tax and other changes to the tax code. That plan still is in committee.

All 42 legislators who were present for the general session Thursday voted to approve the loan for the municipal roads. The country has pledged to add $15 million to bring the total to $75 million. This is nearly $1 million for each of the country’s 81 municipalities or cantons. However, the money will not be divided equally.

The plan to strengthen tax collection and to enhance penalties passed with 38 lawmakers in favor. Three voted no.

Both measures were before lawmakers for the second time. Each bill received two votes. The corporate tax plan probably will come up for an initial vote next week, although lawmakers have wide discretion and could even shelve the proposal.

If the corporate tax bill passes, all forms of corporations will have to pay a proportional amount of $300 based on the effective date of the law before year’s end and then the full $300 in January.

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